The Fundamental Data of equity includes information that pertains to the qualities and quantities of equity performance on financial markets. This information is used to assess a company’s value and for fundamental analysis of the asset.
There is a whole lot of fundamental data available for equity. Some of the more important metrics from the fundamentals are explained below.
Definitions
EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) essentially is the sum of operating profit and interest expense. It allows seeing how much profit a company has generated before it’s impacted by external decisions.
EPS (Earnings Per Share) is calculated as a net income, subtracted by dividends, divided by shares available. It’s one of the most important parameters, used in calculations for some others as well as used by analysts to determine how much the market is willing to pay for each dollar of earnings.
P/E Ratio (Price to Earnings Ratio) relates a company’s share price to its earnings per share. This ratio is used by analysts to determine the relative value of a company’s shares. It can also be used to compare a company against its own historical record.
PEG Ratio (Price to Earnings-to-Growth Ratio) is a stock’s P/E ratio divided by the growth rate of its earnings for the specified time period. The PEG ratio is widely used to determine a stock’s value while also considering the company’s expected earnings growth and is believed to provide a more complete picture than the P/E ratio.
Book Value is the difference between a company’s total assets and total liabilities. It displays the total value of how much assets the shareholders can receive if a company is liquidated.
EV (Enterprise Value) is a measure of a company’s total value. It includes in its calculation the market capitalization and total debt, minus any cash on the company’s balance sheet. EV is a popular metric used to value a company for a potential takeover.
DPS (Dividends per Share), is the sum of declared dividends issued by a company for every ordinary share outstanding. In essence, it’s how many dividends are paid for every share a stockholder has. It’s a metric that is used to calculate income for stockholders.
The Dividend Yield is the ratio of a company’s annual dividends paid to its shareholders compared to the company’s s share price. The dividend yield is represented as a percentage and it shows an estimated one-year return of an investment in a stock-based company. Though it should be noted that not all stocks pay dividends and that DY should not be the only metric considered when investing in a company’s stock.
Shares Outstanding refer to a company’s stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders. It is calculated as “issued shares minus the shares held in the company’s treasury”. A company’s number of outstanding shares is not static and may fluctuate wildly over time.
Shares Float – or floating stock – is the number of shares of a company that can be bought and sold freely. They’re calculated as shares outstanding minus restricted stock or stock held by insiders and major shareholders. A company’s float is an important number for investors because it indicates how many shares are actually available to be bought and sold by the general investing public.
These are the most basic of the fundamental metrics of a stock. We will continue to expand this article with further knowledge of fundamental data.
